The debt based monetary system has become quite extreme. On one hand, the US crossed the $35 trillion national debt milestone, placing a $104k burden on every US citizen. On the other hand, the Congressional Budget Office (CBO) puts federal expenditures for 2024 at 24.2% of GDP.

This divergence between profligate spending and debt ballooning puts the economy on a narrow path. It is exceedingly unlikely that USG would opt to reduce spending, most of which goes to social programs, entitlements and the military. The latter alone is the key ingredient that backs USD as world currency.

Conversely, this entails another Fed balance sheet expansion, with three 0.25% rate cuts this year already…

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